Japan Auto's Overseas Production Tops Domestic for First Time Ever

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Includes: HMC, NSANY, TM
by: Steven Towns

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Japanese Makers of Cars Produce More Overseas

  • Summary: The Japan Automobile Manufacturers Association said that for the year ended March 31st, Japanese auto makers produced 10.92 million vehicles abroad versus 10.89 million domestically -- the first time overseas production has ever exceeded domestic production. Overseas production increased 10.6% year-over-year. This feat is despite surging oil prices, proving the attractiveness of Japan's fuel-efficient autos. Japan-based auto makers have been able to expand market share in the U.S. while General Motors Corp. and Ford Motor Co. have struggled and been forced to scale back production and contain costs. For the month of June, Japan's domestic production rose 7.2% y-o-y while exports increased 14.6%. Honda and Nissan have already reported quarterly earnings with the former's net income soaring 30% and the latter's rising a modest 4.2%. Toyota reports this Friday.
  • Comment on related stocks/ETFs: Japan's Big-3 Auto companies trade in the U.S. with Honda Motor Co (NYSE:HMC) and Toyota Motor Corp (NYSE:TM) listed on the NYSE and Nissan Motor (OTCPK:NSANY) on the Nasdaq. This actually may not be the best of times for Japan's Big-3 but I wouldn't expect things to get worse either. For instance, Toyota has had problems with recalls as of late leading many to question its quality image. And Nissan is struggling to put up better numbers due to a lack of new models on the market. Nevertheless, analysts still seem to like Japan's Big-3 and there's a good chance their shares will easily outperform the broader market. Investopedia Advisor recently made a bull case for Toyota. As for the potential three-way tie-up between Nissan-Renault and General Motors (NYSE:GM), John Bethel questions the likelihood of the deal in: Going, Going, Ghosn? GM-Nissan-Renault Merger Seeming Increasingly Unlikely. Lastly, a summary of Honda's quarterly earnings can be viewed by clicking here.